## SA 200: Overall Objectives of the Independent Auditor
Full title: SA 200 — "Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with the Standards on Auditing"
### Two Primary Objectives (Must Memorise)
Objective 1 — Reasonable Assurance:
Obtain reasonable assurance that the Financial Statements as a whole are free from material misstatement, whether due to fraud or error — enabling the auditor to express an opinion on whether the FS are prepared, in all material respects, in accordance with the Applicable Financial Reporting Framework (AFRF).
Objective 2 — Reporting:
Report on the FS and communicate as required by SAs, in accordance with the auditor's findings.
### Six-Step Overview of How the Objectives Work
1. Obtain reasonable assurance that FS as a whole are free from material misstatement
2. Form an opinion — are FS prepared in accordance with AFRF?
3. Report on the FS
4. Report opinion in accordance with audit findings
5. Communicate findings
6. Reporting & communication in accordance with SAs
### Key Concept: Applicable Financial Reporting Framework (AFRF)
> AFRF = The framework adopted in preparing and presenting FS that is acceptable given the nature of the entity and objective of the FS, OR required by law or regulation.
| Entity Type | AFRF in India |
|---|---|
| Companies | Companies Act, 2013 + Ind AS / AS |
| Others | Applicable statute or accepted framework |
### Key Concept: Reasonable Assurance ≠ Absolute Assurance
- Reasonable assurance is a high level of assurance — but not absolute.
- Sufficient appropriate audit evidence is obtained to conclude material misstatements do not exist.
- Absolute assurance is impossible due to: inherent limitations (sampling, judgment, management representations, fraud concealment).